Industry association supports the proposed IAP compensation framework but urges CIRO to allow multiple shareholders in incorporated advisory businesses
The Securities and Investment Management Association (SIMA) has thrown its support behind the Canadian Investment Regulatory Organization's (CIRO) proposed incorporated approved person (IAP) compensation model - an optional framework that would allow client-facing advisors across CIRO-regulated dealers to structure their compensation through a corporation - while calling for significant changes to ownership rules that it says could dismantle team-based advisory practices.
CIRO published the proposed rule amendments on July 9, 2026, with a comment deadline of November 6, 2026. SIMA submitted its formal response on that date, backing the framework in principle but raising concerns that go to the heart of how many advisory businesses currently operate.
A step toward a level playing field
SIMA, the association formerly known as the Investment Funds Institute of Canada, described the IAP model as a meaningful step toward fairer compensation structures for financial advisors.
Under the proposal, dealer members would not be required to make the new incorporated advisor arrangement available to their client-facing approved persons - a flexibility SIMA explicitly supports, alongside the ability for approved persons to continue providing other financial services such as insurance and financial planning, given that many hold multiple licences.
"We appreciate the substantial work CIRO put into this important project, given the many complexities involved," said Andy Mitchell, President and CEO of SIMA, in the association's November 6, 2026 submission. "We also welcomed CIRO's longer-than-usual consultation period, which allowed members to consider the framework more thoroughly. We support the model with a few key recommendations."
Team model at risk
The association's most pointed criticism targets the ownership restrictions in the current proposal. As drafted, only an approved person and related persons would be permitted as shareholders of an IAP corporation. SIMA is recommending that CIRO allow multiple owners - a change it says is necessary to protect team-based business models that are already well-established across the industry.
The association argues that team structures deliver better client outcomes, enabling continuity of service and smoother succession planning. Restricting ownership to a single approved person and their related parties would, in SIMA's view, significantly disrupt existing operations and could ultimately harm investors who rely on those teams for comprehensive, multi-disciplinary advice.
SIMA also called for teams to be permitted to operate across disciplines, allowing advisors within a shared structure to offer a range of services to clients - a reflection of how modern practices are increasingly built around integrated wealth management rather than single-advisor models.
What's next for the IAP framework
The IAP model, if adopted, could materially change how client-facing advisors structure their businesses and receive compensation, with significant implications for sponsoring firms.
The proposal has drawn broad industry commentary since July 2026, with many advisors and firms supporting the concept of harmonising incorporated compensation options across registration categories while flagging practical concerns - particularly around ownership and governance.
SIMA said it looks forward to continuing to work with CIRO on a framework that protects investors, preserves operational flexibility, and supports the long-term availability of high-quality financial advice for Canadians.
The full text of SIMA's submission is available on the SIMA website.
